As I was visiting with an agent this week, an interesting thought struck me. He shared with me how over the past few years, he has become increasingly frustrated with the amount of time and money he has had to spend prospecting for new clients. His story sounded a lot like the same story I hear from advisors week in and week out, and it went something like this…
“Seminar response is down, direct mail is getting more and more expensive, there are dozens of hot new ‘marketing ideas’ being thrown at me every week, so how do I get a handle on all of this? No matter what I do, I still struggle to find enough new clients each month.”
I feel for this guy. I really do. I remember being there myself, wondering where my next client was going to come from. I remember the days when this business was easy. Prior to 2008, I always ran my business on cash, and I had never charged anything. My other entrepreneur friends couldn’t believe that I could build a profitable business without credit. But then came 2008, when the direct mail response in my zip codes plummeted! All of a sudden, I found myself sinking deeper and deeper into debt, mailing more and more invitations for my seminars in the hopes that I could “market” my way out of the hole I was digging for
myself. While it certainly wasn’t an easy climb out, I learned something in the process worth sharing with this advisor on our call that really seemed to resonate with him.
I said, “Look, here are your options, you can either spend the rest of your career chasing prospects, or you can spend the next three to six months chasing strategic alliances. Either way, you’re going to have to prospect. The difference is, if you spend some time ‘chasing’ the right Centers of Influence, your chasing days could literally
The phone went quiet for a minute as the possibility was sinking in. I went on to explain that most advisors seem content chasing prospects their entire career, and yet all the while complaining that prospecting is the aspect of the business that most of them like the least. Some of you reading this may even hate this aspect of the business, seeing it more as the necessary evil in financial services. This is how I used to view prospecting as well. Then one day I thought to myself, “Why not find a smarter way to do this business?”
I realized that I had to find a way to prospect my way out of a prospecting hamster wheel.
I simply couldn’t afford to continue doing business the way so many do. If you think about it, neither can you. You simply can’t afford to spend the amount of time you do currently in “prospecting mode.” As advisors, we all wear two hats or fill two roles as a prospector AND an advisor. The problem is, we really only get paid for the work we do in the advisory role, which is why it’s critical to develop systems that generate a consistent stream of new prospects on an ongoing basis. This is the only way to really grow your business to the level you’re striving for.
So what does this look like practically?
In my business, I decided that if I just committed myself to prospecting for strategic alliances – regardless of how long that took me – I’d be running my business smarter than my competition and in a much more enjoyable way.
I realized that I was spending money on all kinds of marketing campaigns, all with the goal of creating a base of qualified prospects who both needed my help and saw me as the expert that could help them with their problems. By focusing my efforts on building strategic alliances, I realized the first of these two aspects would be accomplished very quickly, as I could tap into the CPA’s base of clients, which became my “target market.” Due to the fact that this was a very concentrated base of prospects, it made it much easier and much more affordable to implement the marketing strategies necessary to become known as the expert among the CPA’s clients.
The reason that most advisors never really achieve market penetration in any demographic is because they are trying to market themselves to too many people in too many different ways. A perfect example is direct mail. Sending an invitation to 10,000 people for a seminar every other month lacks the consistency and frequency that a successful marketing campaign requires. However, you couldn’t possibly expect to develop any kind of top-of-mind awareness with the people on your mailing list because there’s simply too many of them. And you’d go broke trying to market to that many prospects with the frequency you’d really need to in order to have any lasting success.
The hard facts show that the vast majority of advisors today simply throw money at their marketing problems without a lot of thought as to what their strategy is or what they want their desired results to be. Sure, you can send out a mail campaign, or put up a billboard by your office with the hopes of generating a few calls or setting a few first appointments, but the problem with this and every type of “mass marketing” is that your “chasing days” never end. As long as you try and build your business using these and other mass marketing strategies, you’ll always be frustrated on some level with either the lack of prospects you have to talk to, or the amount of money you have to spend to reach them.
This week’s takeaway is this. Consider refocusing your prospecting time and efforts to “chasing” Centers of Influence instead of prospects. The reality is, each strategic alliance you form can introduce you to hundreds of prospects you never would have reached otherwise and position you as the expert much faster than you can position yourself while at the same time drastically reducing your overall marketing costs.
Commit yourself to incorporating strategic alliances no matter what it takes or how long it takes, and you really can build the 100 percent referral-based practice! But in my experience, it all starts and ends with that decision. Many advisors set out with good intentions of building alliances with CPAs and other professionals, but the vast majority lack the follow-through and determination necessary to really achieve the high level of success that is possible through these relationships. Don’t be one of them.
Decide today to be better than your competition.